Time has come to take risks, say top firms

FINANCE directors at Britain's top companies are more willing to take on risk than at any time since before the recession, according to a survey that fuels hopes for more much-needed investment.

Figures from Deloitte showed 71 per cent of chief financial officers now believe it is a good time to take greater risk onto their balance sheets, double the level of a year ago and a six-and-a-half year high.

Meanwhile, expectations for hiring and spending were at their highest levels for three-and-a-half years, the survey found.

Ian Stewart, chief economist at Deloitte, said: "Strong risk appetite, along with positive readings on hiring and capital spending, supports the view that a surge in corporate spending will become a major driver of the UK recovery."

Mr Stewart said companies were likely to take advantage of low interest rate policy over the next year to fund expansion. They say credit is now cheaper and more easily available than at any time in the past six-and-a-half years.

It should come as a relief to policy makers since, despite an overall improvement in the economic picture, the recovery is seen as unbalanced towards consumer spending, with investment levels disappointing.
The survey questioned 126 chief financial officers including 27 from FTSE 100 companies and 45 from the FTSE 250.

It found their views were fuelled by optimism about growth in the UK, the US and the euro area, though there was pessimism about emerging economies elsewhere.

The survey found 81 per cent expect UK companies to increase hiring in the next 12 months while 80 per cent expect rises in capital expenditure.

Meanwhile separate data from finance directors reported by Capita Asset Services found 68% expected sales to be higher this year while most also expected costs to be flat or lower - indicating healthy profit margin growth.

But it also found that while there were some signs of companies preparing to spend more, they remained nervous about borrowing, and were prioritising paying down debt over returning capital to shareholders.

A further survey from accountants and business advisers BDO showed private sector hiring intentions were at their highest level since June 2008, suggesting unemployment would continue to fall.